UPDATE: U.S. Postal Service, Emery Worldwide Introduce Parcel@Home

The U.S. Postal Service, Washington, and Emery Worldwide, Redwood City, CA, jointly announced a new dock-to-residence worldwide delivery service this week.

The service, Parcel@Home, is targeted to commercial shippers of high-value computers and home electronic products, and specializes in home delivery of multiple-piece shipments weighing up to 70 pounds per piece. It combines Emery's large fleet of aircraft dedicated to heavyweight cargo transport with the USPS' residential postal delivery network, which reaches more than 130 million points via 234,000 postal carriers, representing virtually every home address in the United States.

"Parcel@Home brings a new level of service to the business-to-residence delivery market, a market in which we anticipate substantial growth as more consumers order goods through e-commerce, telemarketing and mail-order sources," said Roger Piazza, Emery's president/CEO.

Piazza also said this system was developed in response to its customers, who were looking for an "efficient way to gain tremendous economics in moving bulk-shipment pallets for distribution as separate shipments to individual homes throughout the U.S."

Before this partnership, Emery, which is a business-to-business carrier, did not deliver to consumers.

When a shipping customer from anywhere in the world signs up for the service, Emery first picks up the bulk, presorted, palletized shipments at the customer's distribution center or factory. The items are then flown to Emery's Global Sortation Center in Dayton, OH, via the company's heavyweight air freight network. After being processed there, the palletized shipments are delivered to regional USPS facilities for ZIP code sorting, then to home delivery through the USPS' residential network.

Customers can log on to Emery's Web site or the USPS Web site and access either tracking system to track package delivery status. End-users can also choose two-, three- or four-day service, depending on final destination or shipper selection.

Pricing will be based on individual contracts and will be competitive, according to the USPS and Emery.

For USPS, the heavier-weight and multiple-piece shipment service "makes the shipping industry aware of the postal service's delivery capacity and flexibility that we believe many [shippers] were not aware of," said Larry Wood, associate vice president, e-business, USPS' Expedited/Package Services division.

The new program will be separate from Emery's Priority Mail contract with the postal service. The contract began in 1998, and under it, Emery created and has operated a network of 10 Priority Mail processing centers for the USPS. The agency signed on with Emery so it could improve its Priority Mail service.

Earlier this year, however, Emery Worldwide filed a complaint in the U.S. Court of Federal Claims in Washington asking for a declaration of contract rights and for a ruling that the USPS is in breach of contractual payment obligations.

According to CNF, the relationship soured beginning in the third quarter of 1999, when the USPS began paying CNF a provisional rate for its services that is below its cost of operating under the contract. In accordance with generally accepted accounting principles, the company is recognizing unbilled revenue sufficient only to recover costs. No profit has been recognized since the second quarter of 1999.